Friday, December 31, 2010

Do Economists Need a Code of Ethics?

"Academic economists, particularly those active in policy debates in Washington and Wall Street, are facing greater scrutiny of their outside activities these days. Faced with a run of criticism, including a popular movie, leaders of the American Economic Association, the world’s largest professional society for economists, founded in 1885, are considering a step that most other professions took a long time ago — adopting a code of ethical standards.

Should economists be required merely to disclose who finances their research, as many academic journals already require? Should they have to reveal which corporate clients they advise, consult for or give speeches to? Should they even be allowed to serve as corporate directors and officers, as many business and finance professors do? Some scholars say the discussion is long overdue."

Given that a paper by Tambe & Hitt regarding offshoring was removed from the public, yes. The only suitable course of action is to have that paper released in full form to the public.

Those two had found evidence that was not desirable to be allowed to exist in public. Perhaps there should be a provision that requires the public disclosure of any conclusion, without the ability to hide behind a "draft" copy or "peer review".

How do economists who get paid by governments disclose their conflict? The public seems to be under the belief that they are value neutral when the government tends to overwhelmingly hire statists. By forcing any economist to disclose a conflict when making an argument against activities proposed by government agencies you give great advantage to the liars who are pushing more taxes, regulations, and a bigger state.

What economists should disclose is their track record. What did they say about the housing situation in the early 2000s? Where did they stand with regard to TARP and the bailouts? What did they say would happen to employment when the stimulus packages were being pushed? If the voters had a scorecard they would be in a better position to figure out who was a panderer to power and who had a clue about the real economy.

Marxists? On what campus? The University of Chicago? Stanford? Dr. Perry at Michigan?

Actually, I cannot think of a single name-brand economist regularly quoted who is a Marxist. It would actually add to the dialogue to have one who is a regular talking head, though I prefer free markets.

Just the abstract (2009 draft) makes it sound like the study is pure baloney: 'We use new offshoring data and new workforce micro-data with occupational classifications to investigate how an increase in the global supply of IT workers has affected the occupational composition of the US IT workforce. Our estimates suggest that when firms open offshore captive centers for IT employment, domestic IT employment skews towards occupations requiring more “personal” inputs, such as network administration, project management, or sales, and away from jobs such as computer programming in which work output can be easily transferred over computer networks.

At firms with offshore captive centers, the fraction of domestic workers employed in occupations requiring little personal input fell by over 8% during the last decade, although mean employment levels for these occupations was steady in firms that were not offshoring. We discuss implications for workers, policy makers, educators, and managers.'...

Well sethstorm if you really wanted the study you could always pay for it...

What exactly is your point?My point is that research exposed something that would have been displeasing for those IT body shops. By not disclosing it, they've simply proven themselves as partial to the fraud in offshoring.

They didn't get the conclusion that they wished, so it got pulled. That is very suspect and very unethical.

"The conclusions were that wages dropped, and that the impact was on the people entering the job market. That kind of blows a large hole through the "offshoring helps" argument."

This is exactly the prediction from simple trade models. The few who face growing competition are harmed. This is so easy to show that it would be disingenuous to claim otherwise.

However, untested was the implication that the many who consume these goods will benefit and benefit by more than the first group. While this is harder to show (much smaller magnitudes to many more consumers), it has been done (e.g. effects of steel tariffs).

The hard policy question is when is it OK to withhold the benefits to the many to protect the costs to a few?

My point is that research exposed something that would have been displeasing for those IT body shops. By not disclosing it, they've simply proven themselves as partial to the fraud in offshoring.

They didn't get the conclusion that they wished, so it got pulled. That is very suspect and very unethical.

On what planet do you live? The 'IT body shops' offshore exactly because it is cheaper for them to meet their demand for labour by hiring people who are capable of doing the work. They got burned by mediocre programmers getting $200 an hour for doing simple work during the Y2K non-crisis so they went after better priced talent.

And nothing got 'pulled.' Data needs to be disclosed properly and verified independently. If it can't be verified there is no valid paper to 'pull.' Academic misconduct in the name of some cause or another is very common so I don't see why you are surprised when papers that can't be supported with actual empirical data get 'pulled.'

It isn't uncommon of a practice to hide behind a draft copy. There is no finished product, since there was no intent to get caught with their pants down.

Again, what is your point? You give us a reference to a paper and claimed that it was 'pulled' because some preconceived conclusion was not reached. Now you admit that there wasn't a finished paper to begin with because the draft was pulled. Given the author's inability to provide data what else would you expect?

Quote from Benjamin: "Actually, I cannot think of a single name-brand economist regularly quoted who is a Marxist."

I agree. Most quoted economists are Keynesian or monetarist (i.e., the same thing), both of which are more fascist than Marxist (i.e., strains of politics, not economics).

There isn't much of a difference between Marxism or Fascism. They are both based on totalitarianism and the worship of the state. Look to any university and you will see that their economic departments are primarily full of panderers to power who make excuses for more state power on most issues or who refuse to argue against state power on the most essential issues.

The hard policy question is when is it OK to withhold the benefits to the many to protect the costs to a few?

It isn't hard at all. The guiding principle should always be voluntary transactions. There is no reason why a foreign programmer should not be able to trade his labour for money. Why shouldn't consumers be free to interact with suppliers of goods or services without interference from third parties?

Again, what is your point? You give us a reference to a paper and claimed that it was 'pulled' because some preconceived conclusion was not reached. Now you admit that there wasn't a finished paper to begin with because the draft was pulled. Given the author's inability to provide data what else would you expect?

You put words in my mouth that I haven't said. The point is that the paper should be available even if the conclusion is damaging to their own case.

There is no paper that is available to the public. The paper does exist, just in a form unavailable to the public (aside from the abstract).

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You don't want to consider the idea that the paper has some damaging conclusions that would make it difficult to argue in favor of offshoring.

They got burned by mediocre programmers getting $200 an hour for doing simple work during the Y2K non-crisis so they went after better priced talent.

Then why would they allow for the fraud on both ends? This is about fraudulent qualifications for the offshore talent and fraudulent regulatory certifications that no US citizen could do the job. This is fraud that jumps from "mediocre" to "dangerously incompetent".

That $200/hr consultant ends up fixing up the whole mess if there is anything left of the company.

You are defending fraud, just because the economic incentives favor it.

"...the paper should be available even if the conclusion is damaging to their own case."

If the authors wanted to make a "case" at all, it was this:

"In this paper, we simply sought to dispel the myth that globalization generates no losers"

Their conclusion indicates that IT companies that use H-1B workers pay less than companies who don't, but hire more workers. This seems to SUPPORT their "case".

However, being unable to provide the data they worked with makes the whole thing meaningless. No one else could replicate their work, or prove or disprove their conclusion. Having opinions and making unsubstantiated assertions isn't how serious studies are done.

You seem to infer that the authors are trying to hide something, but there is nothing to hide.

By the way, I don't know what "myth" the authors are talking about. I don't believe anyone suggests that there are no losers from globalization, only that overall, the benefit is positive.

However, being unable to provide the data they worked with makes the whole thing meaningless. No one else could replicate their work, or prove or disprove their conclusion. Having opinions and making unsubstantiated assertions isn't how serious studies are done.

Why would they not want to provide that data and the paper? They leave the abstract up, but nothing more.

Also, I would imagine that the paper that was originally available, was based on sound research. I'm not sure NYU is bad enough of a university to allow unsubstantiated research to get that far.

Releasing the paper and the data would go leaps and bounds to answering the questions at hand.

By the way, I don't know what "myth" the authors are talking about. I don't believe anyone suggests that there are no losers from globalization, only that overall, the benefit is positive.

You put words in my mouth that I haven't said. The point is that the paper should be available even if the conclusion is damaging to their own case.

There is no paper that is available to the public. The paper does exist, just in a form unavailable to the public (aside from the abstract).

The point is that it isn't a paper. It is an opinion piece and will remain an opinion piece until the data and conclusions are allowed to be evaluated independently. I have no problem with the authors writing a nice commentary in some magazine or newspaper or getting some academic journal to publish it if it passes review. But the fact that they can't get the research published probably means that even the academic journals, which tend to be very progressive oriented, find the work too flawed to accept.

You don't want to consider the idea that the paper has some damaging conclusions that would make it difficult to argue in favor of offshoring.

There is nothing damaging about any conclusion that can be reached. Companies are free to reduce their costs to satisfy their customers and are not in the business to redistribute wealth from their shareholders to a protected segment of the workforce. If IT workers want too much money they will find that there are others who will come into the market and lower the compensation rate to a reasonable level.

Then why would they allow for the fraud on both ends? This is about fraudulent qualifications for the offshore talent and fraudulent regulatory certifications that no US citizen could do the job. This is fraud that jumps from "mediocre" to "dangerously incompetent".

You are confused. If I want someone to write programs for me I decide who is qualified and who isn't. If I get it wrong I fail and go out of business. The idea that some outside third party can arbitrate and tell me who is qualified to tell me who is 'qualified' is bizarre.

That $200/hr consultant ends up fixing up the whole mess if there is anything left of the company.

No. That $200/hr consultant was a mediocre programmer looking for simple lines of code in old programs that s/he was probably not qualified to write. The pay was not the result of any qualification or skill but a function of supply and demand. When the demand was gone after the Y2K scare was over the appropriate compensation rate for many of those programs fell by 80% or more as it should have.

You are defending fraud, just because the economic incentives favor it.

No. I am defending voluntary transactions. You should be free to hire any programer that you wish. if you make a bad choice you will go bankrupt. If you make a good choice you may drive your competitors into bankruptcy. The market will reward the best decisions and punish the bad ones. As it should.

By the way, I don't know what "myth" the authors are talking about. I don't believe anyone suggests that there are no losers from globalization, only that overall, the benefit is positive.

I don't understand this either. Nobody that I have heard speak on the topic has ever claimed that everyone wins when there is more globalization. Those on the left make it clear that they don't like it because inefficient domestic producers lose jobs because consumers will switch to the cheaper products offered from abroad. The critics on the right make it very clear that inefficient companies will be forced to make changes or go out of business. Our friend just tries to build a straw-man argument that is easy to knock down by telling an outright lie.

Also, I would imagine that the paper that was originally available, was based on sound research. I'm not sure NYU is bad enough of a university to allow unsubstantiated research to get that far.

You can imagine anything you want but it is very possible that the reviewers did not ask for the data and the problem only became apparent when someone else wanted to check the findings. Once authors cannot provide support for their conclusions their paper is no longer considered sound science, even if it is not withdrawn by a journal. We see this with the global warming promoters all the time.

"Finally, I'm not confused at all. I sense frustration and contempt in you. Frustration by your attempt to throw insults at facts, contempt in your willingness to justify fraud."

seth, your "sensors" are working overtime today. What facts are you referring to? We haven't seen any facts, only opinion and foregone conclusions.

You seem to miss the point that the authors of the study were trying to make the point you would agree with, but were unable to do so due to their inability to provide data. That doesn't mean it's not a valid point, just that they were unable to show it.

When researchers start out with a conclusion - "In this paper, we simply sought to dispel the myth that globalization generates no losers" - then try to find data to support it, the study can't be taken seriously.

You seem to see some weird conspiracy where only sloppy work is evident.

It doesn't look like there's any programming work in your future. Wouldn't your time be better spent looking for other work? How about network administrator? In the time you have been idle, you could have gotten your MCSE or MCITP certification.

You seem to miss the point that the authors of the study were trying to make the point you would agree with, but were unable to do so due to their inability to provide data. That doesn't mean it's not a valid point, just that they were unable to show it.

Wrong way around, and throwing around smears isn't helping your case.

They were trying to make a claim in support of offshoring, but their research went the other way. It didn't just specify programming, but the entirety of IT. All of it.

Wouldn't your time be better spent looking for other work?

Not outside of IT.

At 113+ not-so-idle weeks, I'm not sure that would do anything. Long-term kind of requires acts of government force or connections to overcome that.

What does it mean to you? Are you having trouble with the word dispel? What is it that you don't understand about that sentence? They wanted to show that offshoring DOES cause losers.

But that doesn't make any good point.

[some random insult]

While a productive use would be better, I'll just have to settle for them paying their tax dollars into various programs. They're paying a price for avoiding me. Not a good thing, but it's costing them something and they're not getting any productive value.

Their choice to hurt themselves, when a productive use is better for everyone involved.

So you don't care how you get to the decision, or that it is based on fraud (as offshoring and outsourcing always do). You only care that you get to make that choice.

There is no fraud. Companies outsource because it keeps their customers happy and add to their profits. You have no right to intervene in what decision they make just as they have no right to intervene in any decisions that you make.

You can't accept the fact that it looked bad for them, and that not releasing the paper was damage control.

I don't care. I simply pointed out that a paper without data is just commentary.

You have a natural contempt for a US citizen having work. You show this by every example being against the US citizen, and in favor of the offshore country.

No. I am all for US citizens getting the best job that they can get.

When someone like you uses fraud to justify offshoring, there is not only a right but an obligation for a third party to step in to remove said fraud.

I am not justifying anything because no justification is required.

Finally, I'm not confused at all. I sense frustration and contempt in you. Frustration by your attempt to throw insults at facts, contempt in your willingness to justify fraud.

Yes, you are confused. After many interactions with people on this board you still have no clue and keep arguing that the state should trample on individual rights to protect losers like you rather than let people who are productive do what they have always done to make themselves and the country better off.

There is no fraud. Companies outsource because it keeps their customers happy and add to their profits. You have no right to intervene in what decision they make just as they have no right to intervene in any decisions that you make.

All those fake jobs, all the lack of enforcement, all the reluctance to disclose offshoring efforts does point to fraud. Whether you acknowledge those facts is up to you.

Given the fraud that is used to that end, the obligation stands to step in, kill it, and to make sure it doesn't come back. The excuse of "simply serving customers" is morally equivalent to "just doing as ordered".

Marxists? On what campus? The University of Chicago? Stanford? Dr. Perry at Michigan?

Actually, I cannot think of a single name-brand economist regularly quoted who is a Marxist. It would actually add to the dialogue to have one who is a regular talking head, though I prefer free markets.

Sorry. I should have siad authoritarian rather than Marxist.

Name me any mainstream economist who is not a pander to power and does not argue that the state can legitimately interfere in the economic lives of individuals. I consider someone like Robert Reich to be a Marxist even though he claims that he is all for capitalism that is closely overseen by regulators. Now you could argue that he is a National Socialist but I don't see a material difference.

If you pay close attention to what is essential you will find that the views from the Left are not all that different than those of the shills on the Right. Both sides argue about trivia but seem to have no problem with the question of state legitimacy when it comes to meddling in the economy. Their arguments are about effectiveness, not legitimacy.

The only intellectually consistent arguments come from the anti-authoritarians that have been marginalized in the fight for power between the Left and Right. As long as they stay on the fringes society is doomed to slide towards the economic and political abyss.

And before I get attacked with examples of the Monetarist school or someone like Mark let me point that they accept the Fed's monopoly on the issuance of money and the use of the legal tender laws to eliminated gold as competition to the fiat currency. That is fully consistent with Marxism as one of the modern panderers to power understood so well.

"Lenin is said to have declared that the best way to destroy the Capitalistic System was to debauch the currency. . . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose."Ref: JMK, The Economic Consequences of the Peace, 1920.

All those fake jobs, all the lack of enforcement, all the reluctance to disclose offshoring efforts does point to fraud. Whether you acknowledge those facts is up to you.

What 'fake' jobs? I don't pay management to create jobs. I pay it to keep customers happy and make a good return for investors. Globalization creates jobs by reducing waste and increasing real wages. What more do you want?

Given the fraud that is used to that end, the obligation stands to step in, kill it, and to make sure it doesn't come back. The excuse of "simply serving customers" is morally equivalent to "just doing as ordered".

What fraud?

The "voluntary transaction" excuse does not apply here.

It always applies. People have the right to work for whatever employer offers them the best deal and employers have the right to pick the employees that make the most amount of sense. Customers have the right to buy from whoever offers the best deal.